Basic ideas on Surety Bond

What is a Surety Bond?

Surety Bond is a contractual assurance, formed by a bonding company on behalf of a principal, of repaying a sum of money to an obligee, if in case the principal fails to repay the money due to the later.

A Surety Bond is an agreement among not less than three people:

1. the principal - the one who has to repay the money,
2. the obligee - the one who will receive the money
3. the surety - the one who assures the obligee that the borrower would perform the stipulated task.

Here the function of the surety is to agree to meet the due of the principal if the later fails keep the promise. It is a form of insurance, however, unlike insurance, it safeguards the obligee not the principal.

Surety Bond is required by whom?

Basically, the private industries, Municipalities and Government bodies requires the Surety Bond in order to make sure that the principal adheres to all laws, policies or contracts of the government. This is a measure to prevent fraudulent.

Who will issue the Surety Bond?

A Surety Bond Company will issue the surety bond. Perhaps, the company, necessarily has to be licensed and permitted by the department of insurance of the state you belong to.

How to find a good Surety Bond Company?

It is easy. You can check the surety bond company's rating with Ambest. A T-Listed Surety Bond Company signifies that the Surety Company Hold the Certificates of Authority as Acceptable Sureties for The Federal Government (Department Circular 570) (T-Listed).

New Business & Surety Bond Program

A new entrepreneur or a business owner are generally not aware of the basic concepts of surety bond, what it is and why it is required, until owners gets experience and stay into their business for a long, and their business get settled down and start running smoothly. Then why not to get the knowledge beforehand? To start with, about the surety bond program we should first know what is a Surety Bond? A surety bond is like a pre requisite for a new business; it is of paramount importance for a business, since in order to get a license or a permit to start a new business an owner needs to secure a surety bond to legally operate.

A surety bond guarantor takes into account an owner’s experience in the industry as well as length of time in business which can sometimes present a problem with new business owners. At this stage an owner need to have a surety bond to get started and turning back is not an option which is why we developed the new business surety bond program.

New Business Surety Bond Program and your Eligibility?

Always do check your eligibility for the New Business Surety Bond Program. So here is good news, any new entrepreneur or a business owner is eligible for the new business surety bond program. Just they need to comply few norms, such as the application process which will include some questions about length in business and based on that we will determine your eligibility for the program.

Procedure for applying for the program?

You just need to fill out the form to your right and a surety bond expert will contact you to discuss your options. It is always advisable that you should be sure enough to note on the application form that your business is a new one and to be precise” you are a new business owner and we will automatically shop your rate through our special partnerships. It's that simple!